Quarterly figures give hope to badly-hit Honda

AFP News27 April 2012
Japanese automakers have come under pressure from the value of the currency
Japan automaker Honda Motor has said its net profit for the fiscal year to March plunged 60.4 percent from the previous year due to Japan's quake-tsunami disaster, flooding in Thailand and the strong yen

Honda Motor said on Friday its full-year profit plunged 60.4 percent but it showed signs of recovery in the final quarter, bouncing back from the impact of natural disasters in Japan and Thailand.

Group net profit for the 12-month period came to 211.5 billion yen ($2.6 billion), down from 534.1 billion yen a year earlier, the company said.

Its full-year sales were down 11.1 percent to 7.95 trillion yen and operating profit dropped 59.4 percent to 231.4 billion yen.

The slump was "mainly caused by temporary suspension of production and production adjustments as a result of the Great East Japan Earthquake... as well as flooding in Thailand, and unfavourable foreign currency translation effects," it said in a statement.

Japanese automakers saw extensive damage to their supply chains as a result of the natural disasters that struck in Japan in the spring and Thailand in the autumn.

But in the January-March quarter alone, Honda's group net profit surged 60.7 percent from a year earlier to 71.5 billion yen on sales at 2.41 trillion yen, up 8.7 percent.

The quarterly profit and sales gains were partially due to brisk trade in Japan, where government subsidies for eco-friendly vehicles were introduced late December, helping Japanese automakers battered by a strong yen.

The country's carmakers have come under pressure from the value of the currency, which last year hit record highs against the dollar, making exports relatively more expensive overseas and cutting the value of repatriated earnings.

For the current fiscal year to March 2013, Honda forecasts a further recovery, projecting net profit at 470 billion yen and operating profit at 620 billion yen on sales of 10.3 trillion yen.

Honda reopened its flood-hit assembly plant in central Thailand last month, nearly six months after the production line was forced to close. It said the kingdom would remain a key production base.

Eyes will now turn to Japan's two biggest automakers, Toyota and Nissan, when they report their earnings early next month to see if they have been able to achieve the same feat as Honda.

Mazda Motor reported a group net loss of 107.7 billion yen in the fiscal year to March, much larger than the 60.0 billion yen loss reported a year earlier.

At the operating level, the company, based in Hiroshima in western Japan, fell into a 38.7 billion yen loss, from a profit of 23.8 billion yen the year earlier.

Sales fell 12.6 percent to 2.03 trillion yen.

For the current fiscal year to March 2013, Mazda forecast a return to the black, projecting net profit at 10 billion yen and operating profit at 30 billion yen on sales of 2.2 trillion yen.